Truly, wider supply chain models that enriched the globe had to be re-adjusted due to the Covid-19 outbreak. As we breathe, even now, companies across the world, who relied upon components and raw-material from China, are now hunting new shores for such a purpose, as the scenario is still expected to remain unchanged in the advancing year while companies are not willing to allow disruption to prevail longer.
However, experts believe that a bunch of groundbreaking steps can be initiated right-away in a bid to safeguard their supply chain network from the ghastly disruption and the best foot forward would be:
- To maintain some inventory in form of safety stock,
- Re-structuring certain segments of their supply chains, and
- By letting production to be done on their premises.
But such should be reckoned as tentative solutions and are not designed to fulfil key business objectives completely as well as permanently and the need of the hour is to develop resilience on-premise and within the organizational boundaries to sustain for a longer period.
Flexible Planning And Virtues In Resilience Holds The Key To Success:
Truly, as the experience goes, enterprises that can handle the resilience element in their supply chain network, are better equipped to deal with such crisis, save refining the customer satisfaction and thereby continue their sail on the success sea with constant waves of revenue generation and cash flows rushing in. Prominent consulting agency, Bain & Co, released reports in this regard, accentuating upon the utmost power of resilience to gain dominant competitive virtues.
Some of the benefits can be summed up, as under:
- Revenue graph is phenomenal with towering blocks alongside product development cycle that dips by 40% to 60%.
- Further, operational and transportation costs are pulled down too,
- Inventory turnover can be strengthened by 20% to 40%,
- Production process can be re-settled at some nearby location so as to check the critical issue of disruption,
- With supreme automation on our side, mass gathering can be prevented and the concept of social distancing can be implemented, but with the overall promise to make quick recovery from massive economic slump ongoing,
- Finally, as cost involved with automation, sinks, innovation in technology will yield more investment and would equip enterprises to utilize on-premise benefits on wider scale and to enable resilience to endure more for a longer period.
Not mincing words, innovation in technology is the premium bubble with the companies through which, they could re-script business planning and forecast growth with a thumping assurance.
Businesses Should Harness Advanced Analytics:
Not surprisingly but to build competitive edge, modern day technology needs to be harped upon and companies would become immune to any disruption and losses. To withstand the effects of disruption, support and preference should be gathered in favour of advanced analytics, on the basis of which planning and forecasting should be refined. Going by the findings of Bains research, effects from disruption can be minimized when advanced analytics are drawn into operations. Apparently, in such revelations, Procter & Gamble’s management of analytics act like a focal point because of which this enterprise emerged minimally hurt from Hurricane Sandy in 2012. The company opted for a cloud-based platform for fetching reliable stream o crisp and actionable data and to adjust their production line as per demand inculcated thereupon. As such, in event of any point of production was hampered, plan B sneaked into implementation quickly to restore production and the result was that the factory’s downtime was squeezed to mere 2 days.
Later on in 2017, owing to deeper inroads and reliance on tech tools, during the time another hurricane hit the coast, the P&G management was able to predict well beforehand the extent of possible damage to be suffered and corrective efforts were initiated just then, to manage the damage well, in advance. Clearly, in the light of such tools, the company developed contingency plans as well as certain other pre-emptive decisions, such as relocation of inventory, just before the hurricane. In this way, loss of finance and crucial business hours were saved from getting killed, unlike other businesses which had to suffer, due to their strong presence in the geographical region.
Now, discussing about the ongoing pandemic, gaping holes and shortcomings have been left open in the supply chains sprawled globally and which have all sort of businesses in their fold, small, medium or large and every business has been deeply affected and their business potential is said to be shaken to the core. As a silver lining, businesses need to ascertain their networks, identify the shortcoming and should re-structure their supply chains by keeping technology at the centre and they can surely regain vigour and can be build unflinching operational flexibility to meet any challenges which future may harbour.